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EGBS: Tight Ranges In The Absence Of Notable Macro Drivers

EGBS
EurozoneBulletGlobalFixed Income BulletsRegionMarkets

Bunds have traded in a 24-tick range today in the absence of notable macro drivers. Futures are currently +15 at 133.30, with initial support around 132.93 (corresponding to the 2.30% 10-year yield level) shielding key support at 132.65 (Sep 2 low).

  • The 10-year OAT/Bund spread is little changed at 77bps after Fitch downgraded France’s sovereign credit outlook to “Negative” from “Stable” on Friday.
  • The OLO/Bund spread is 1bp wider at 61bps though, after Moody’s downgraded Belgium’s outlook to “Negative”.
  • Peripheral spreads to Bunds are generally tighter, with BTPs outperforming (1.5bps narrower today at 128bps).
  • Eurozone net issuance is expected to be negative for the next three weeks, which may provide some underlying support to EGBs in the absence of fundamental drivers.
  • The US Colombus Day holiday may limit activity this afternoon.
  • This week’s regional calendar is headlined by the ECB decision, where a 25bp cut is widely expected and essentially fully priced in OIS.
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Bunds have traded in a 24-tick range today in the absence of notable macro drivers. Futures are currently +15 at 133.30, with initial support around 132.93 (corresponding to the 2.30% 10-year yield level) shielding key support at 132.65 (Sep 2 low).

  • The 10-year OAT/Bund spread is little changed at 77bps after Fitch downgraded France’s sovereign credit outlook to “Negative” from “Stable” on Friday.
  • The OLO/Bund spread is 1bp wider at 61bps though, after Moody’s downgraded Belgium’s outlook to “Negative”.
  • Peripheral spreads to Bunds are generally tighter, with BTPs outperforming (1.5bps narrower today at 128bps).
  • Eurozone net issuance is expected to be negative for the next three weeks, which may provide some underlying support to EGBs in the absence of fundamental drivers.
  • The US Colombus Day holiday may limit activity this afternoon.
  • This week’s regional calendar is headlined by the ECB decision, where a 25bp cut is widely expected and essentially fully priced in OIS.